Mealey's Insurance Bad Faith : Mealey's : Legal News & Analysis

Mealey's Insurance Bad Faith

November 26, 2024
Judge Grants Motion To Strike Misrepresentation Defense In Hailstorm Coverage Row

DENVER — A Colorado federal judge on Nov. 25 granted a homeowner’s motion to strike her insurer’s affirmative defense related to voiding her policy for purported misrepresentation in the homeowner’s bad faith suit against the insurer for alleged failure to cover hail damage, finding that the defense fails to meet the pleading requirements for particularity under the Federal Rules of Civil Procedure.
November 22, 2024
COMMENTARY: 2024 Key Insurance Decisions, Trends & Developments & A Look Ahead To 2025

By Scott M. Seaman, Pedro E. Hernandez and Lisa M. Roccanova
November 22, 2024
Insured Failed To Comply With Policy’s Notice, Warranty Provisions, Judge Says

SAN DIEGO — No coverage is owed to a hospital company insured under a pollution liability policy for remediation of mold discovered in the insured’s heating, ventilation, and air-conditioning (HVAC) systems because the insured failed to comply with the policy’s warranty and notice provisions, both of which are conditions precedent to coverage, a California federal judge said in granting the insurer’s motion for summary judgment and denying the insured’s motion for summary judgment.
November 21, 2024
Radioactive Materials Exclusion Clearly Bars Coverage, Insurers Maintain

CHICAGO — The Seventh Circuit U.S. Court of Appeals should affirm a district court’s finding that no coverage is owed by insurers pursuant to the policies’ radioactive materials exclusion for an underlying suit seeking damages for bodily injuries caused by exposure to electromagnetic (EMF) radiation from the insured’s electric transformers because the radioactive materials exclusion clearly bars coverage, the insurers say in their Nov. 20 appellee brief.
November 18, 2024
Insured’s Snow-Damage Suit Remanded To State Court Based On Lack Of Diversity

RIVERSIDE, Calif. — A California federal judge remanded an insured’s suit to California state court after determining that complete diversity of citizenship does not exist based on the insured’s naming of an insurance agency as a defendant in a second amended complaint, which alleges breach of contract, bad faith and negligence claims based on the property insurer’s denial of coverage for the partial collapse of an insured building’s roof.
November 18, 2024
Judge Dismisses 1 Insurer From Bad Faith Suit Arising From Construction Defects

DENVER — Following the parties’ joint stipulation of dismissal, a federal judge in Colorado dismissed with prejudice one insurer from a plaintiff insurers breach of contract and bad faith lawsuit seeking recovery of the defense and settlement costs that it paid on behalf of its general contractor insured in an underlying construction defects lawsuit.
November 18, 2024
Third-Party Claimant’s Statutory Bad Faith Claim To Proceed, Judge Says

ORLANDO, Fla. — A third-party claimant’s statutory bad faith claim against an auto insurer can proceed because the claimant properly filed a civil remedy notice (CRN) as required under Florida law and the auto insurer failed to cure the CRN when it refused to pay the excess judgment entered against its insured, a Florida federal judge said in denying the auto insurer’s motion to dismiss the claim.
November 18, 2024
Issues Of Fact Exist On Whether Auto Insurer’s Conduct Was Bad Faith

DAYTON, Ohio — An Ohio appellate court reversed and remanded a trial court’s ruling in favor of an auto insurer on an insured’s bad faith claim after determining that issues of fact exist as to whether the insurer lacked good faith in handling the insured’s claim for uninsured motorist damages.
November 15, 2024
Majority Affirms Ruling In Last Resort Insurer’s Favor In Hurricane Coverage Suit

BATON ROUGE, La. — A majority of a First Circuit Louisiana Court of Appeal panel held that a lower court properly interpreted the state Legislature's amendment of Louisiana Revised Statutes Section 22:1892(H) by Act 290 to be a procedural change that applied retroactively and, as a result, eliminated any class action for damages, including bad faith penalties, brought against the state’s insurer of last resort.
November 15, 2024
Insurer Acted In Bad Faith By Reserving Right To Deny Coverage, Insured Alleges

RALEIGH, N.C. — An insured filed suit in North Carolina federal court, claiming that its insurer acted in bad faith by issuing a reservation of rights letter after defending the insured in an underlying suit for more than a year.
November 14, 2024
Calif. Panel: Defense Costs Not Restitutionary Damages In D&O Coverage Dispute

SAN JOSE, Calif. — A California appeals panel reversed a lower court’s ruling in favor of an excess directors and officers liability insurer in a breach of contract and bad faith lawsuit brought by an insured and its former chief financial officer, rejecting the insurer’s argument that the insured’s claim for underlying defense costs is the substantial equivalent of “restitutionary damages.”
November 14, 2024
Homeowners Insurer’s Request For 2nd Examination Under Oath Not Unreasonable

LOS ANGELES — A trial court did not err in granting summary judgment to a homeowners insurer on breach of contract and bad faith claims because the insurer did not act unreasonably in requesting a second examination under oath from the insured and the insured breached the duty to cooperate with the insurer as required under the policy, a California appellate court said.
November 13, 2024
Judge Partially Denies Freddie Mac’s Summary Judgment Motion In D&O Coverage Suit

WASHINGTON, D.C. — A federal judge in Washington, D.C., granted in part and denied in part a motion for partial summary judgment brought by Federal Home Loan Mortgage Corp. (Freddie Mac) in its breach of contract and bad faith lawsuit seeking directors and officers liability coverage for underlying expenses it incurred on behalf of its directors, officers and employees who were subpoenaed by the Securities and Exchange Commission during an investigation and subsequent lawsuit.
November 11, 2024
Appraisal Award Partly Vacated, Counterclaim Dismissed In Wildfire Coverage Suit

BIRMINGHAM, Ala. — A federal magistrate judge in California granted in part a homeowners insurer’s motion to vacate a more than $33 million appraisal award in a coverage dispute over damage caused by the Glass Fire in Northern California, further granting the insureds’ motion to dismiss the insurer’s counterclaim for breach of the implied covenant of good faith and fair dealing.
November 11, 2024
Judge Tosses Breach Of Contract Suit Against MetLife Over $100,000 Lapsed Policy

FLORENCE, S.C. — A South Carolina federal judge dismissed a breach of contract suit filed against Metropolitan Life Insurance Co. (MetLife) by a decedent’s son seeking death benefits under his father’s $100,000 life insurance policy which ended when his father retired, finding that the son’s breach of contract claim fails because agency granted to him by his father pursuant to a power of attorney (POA) ended upon his father’s death and therefore precluded the son from extending post-retirement coverage on his father’s behalf.
November 08, 2024
N.Y. Appeals Court: Evidence Conclusively Established Insurer Did Not Act In Bad Faith

BROOKLYN, N.Y. — A New York appeals court concluded that a lower court should have granted an insurer’s motion to dismiss an insured’s bad faith claim in a coverage dispute over an underlying personal injury lawsuit but found that the lower court properly determined that the insurer failed to establish that coverage was barred under the policy’s employee exclusion.
November 07, 2024
No Coverage Owed For Alleged Sexual Assault By Insured, 9th Circuit Affirms

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals held that an insurer owes no coverage for an underlying sexual assault action brought against the insured, affirming the lower federal court’s grant of summary judgment in favor of the insurer in the insured’s breach of contract and bad faith lawsuit.
November 05, 2024
Freddie Mac, Insurer Move To Dismiss Claims Between Them In D&O Coverage Suit

WASHINGTON, D.C. — Federal Home Loan Mortgage Corp. (Freddie Mac) and an insurer filed a joint stipulation asking a Washington federal court to dismiss the claims between them in Freddie Mac’s breach of contract and bad faith lawsuit seeking directors and officers liability coverage for underlying expenses it incurred on behalf of its directors, officers and employees who were subpoenaed by the Securities and Exchange Commission during an investigation and subsequent lawsuit.
October 29, 2024
Insurer Acted Unreasonably By Failing To Defend Insured Against Negligence Suit

SEATTLE — A trial court erred in finding that a settlement between a third party and an insured was reasonable because the insurer was not provided with an opportunity to be heard at the reasonableness hearing; however, the trial court properly entered summary judgment in favor of the assignee on claims alleging breach of contract, bad faith and violation of the Washington Insurance Fair Conduct Act (IFCA) because the insurer’s failure to defend its insured was unreasonable, the Division I Washington Court of Appeals said Oct. 28.
October 28, 2024
Denial Of Coverage For Failed Water Pipe Was Not Bad Faith, Panel Says

PASADENA, Calif. — A district court did not err in granting summary judgment in favor of a homeowners insurer on a bad faith claim because no reasonable juror could find that the insurer’s denial of coverage based on its policy’s exclusion for continuous or repeated seepage or leakage of water was unreasonable, the Ninth Circuit U.S. Court of Appeals held Oct. 25 in an unpublished opinion.
October 25, 2024
Questions Of Fact Exist On Request To Reinstate Long-Term Care Policy, Panel Says

TRENTON, N.J. — The New Jersey Superior Court Appellate Division on Oct. 24 reversed and remanded a trial court’s ruling on a breach of contract claim after determining that questions of fact exist on whether the insured properly requested that a long-term care insurance policy be reinstated within the policy’s grace period.
October 25, 2024
Auto Coverage Suit To Remain In Federal Court; Bad Faith Claim Fails, Judge Says

LAS VEGAS — A Nevada federal judge denied an insured’s motion for remand and granted an auto insurer’s motion to dismiss the insured’s bad faith claim after determining that the insured failed to show that complete diversity of citizenship does not exist and failed to provide sufficient facts showing that the insurer’s valuation of her claim was unreasonable.
October 24, 2024
Panel Says Auto Insurer’s Request For Liability Release Was Not Bad Faith Conduct

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a district court’s ruling that an auto insurer did not act in bad faith by requiring a signed release of liability for a relative of an insured because the auto insurer’s request for the release of liability was not unreasonable based on the insurer’s determination that the insured’s relative was an additional insured under its auto policy.
October 23, 2024
Reconsideration Of Dismissal Sought In Crop Insurance Extracontractual Damages Row

COOKEVILLE, Tenn. — Arguing that dismissal of their suit seeking extracontractual damages from a crop insurer “was incorrect and premature” because a related suit against federal regulators remains pending, farmers moved in Tennessee federal court for reconsideration of the ruling against them.
October 23, 2024
Bad Faith Claim Cannot Proceed Against Disability Insurer, Federal Judge Says

NEW YORK — An insured’s bad faith claim against a disability insurer cannot proceed because under New York law, an insured cannot allege a first-party bad faith claim against an insurer based on a denial of coverage, a New York federal judge said in granting the disability insurer’s motion to dismiss the bad faith claim.